Rights of use in audiobook downloads

E-books have meanwhile become a popular alternative to classical books for many. Increasingly, online retailers provide e-books for download against payment. Once the customer is in possession of the e-book, the question arises whether they are permitted to pass the file on to third parties. This was the subject of proceedings before the Regional Court (LG) Bielefeld.

The umbrella association of German consumer advice centres as well as consumer and socially-oriented organisations contested a clause in the general terms and conditions of an online retailer in which acquirers of e-books and digital audiobooks were, amongst other things, prohibited from passing them on and reselling them to third parties, as follows:

(…) "In connection with this offer, the customer acquires the simple, non-transferable right to use the offered titles exclusively for personal use in accordance with the Copyright Act (Urheberrechtsgesetz) in the manner offered."

It is not permitted to change the downloads in any way in terms of content and editorial matters or to use amended versions, to copy them for third parties, to make them publicly accessible or to forward them, to upload them to the Internet or to other networks for payment or free of charge, to imitate them, to resell them or to use them for commercial purposes."

Court decision

The Regional Court (LG) Bielefeld (Judgment of 5 March 2013, Az. 4 O 191/11) did not, contrary to the plaintiffs' view, see any unreasonable detriment to consumers in the clause. This would be the case, amongst other things, if the clause would jeopardise the achievement of the purpose of the contract. However, the purpose of the contract was to grant the consumer a right of use of the e-book or audiobook, which encompassed the download and repeated listening or viewing. The passing on or resale to third parties was not the primary purpose of the contract.

The clause was furthermore justified by equivalent interests of the provider. Since loss-free transmission of digital files to third parties is possible, the online retailer had considerable economic interests in a prohibition on resale. By contrast, the interest in passing on or reselling the file to third parties was only secondary.

The invalidity of the clause did not follow from misleading customers through the use of terms of the law of sale. The buyer could not conclude from these that ownership of the e-book or audiobook would be transferred to them and thereby unrestricted permission to pass it on would be granted. The use of terms of the law of sale merely served for better comprehensibility for the consumer. At the same time, the clause expressly clarified that the acquisition did not simultaneously include the right to pass on and resale to third parties.

The court further addressed the question of whether the clause impermissibly restricted a distribution right of the consumer arising with the download. This distribution right could arise through exhaustion. Exhaustion is assumed when a concrete work is put into circulation with the consent of the author or exclusive rights holder. In the view of the Regional Court (LG) Bielefeld, exhaustion is only possible in the distribution of tangible items, not in digital files. The European legal provisions for computer programmes, which treated both forms of exploitation equally, were not to be applied to audiobooks.

Furthermore, the right to make private copies was not violated. For this neither permits the production for third parties nor a resale.

Conclusion

Following the judgment, distributors of e-books and audiobooks are permitted to prohibit acquirers from passing them on and reselling them to third parties in their general terms and conditions. However, in one respect the judgment is highly questionable, for contrary to what is assumed, the right to make copies for private use according to the settled case law of the Federal Court of Justice (BGH) does indeed permit the production of copies for third parties with whom the user is personally connected. Had the judgment been correct, the entire clause would have been void.